EXECUTIVE AGREEMENT

EXHIBIT 10.3

EXECUTIVE AGREEMENT

October, 31, 2005 (“Commencement Date”)

Hans Ydema

Buchenstrasse 20

Bruckberg, Germany 84079

Dear Hans,

Based on your current position as managing director (Geschäftsführer) of Entrust, GmbH . (“Entrust” or the “Company”) and your appointment as an officer of Entrust, Inc. in the role of Senior Vice President, EMEA Sales, you, are eligible for certain executive severance benefits provided for by this Executive Agreement (“Agreement”). In signing this Agreement you explicitly agree, that you are not an employee (Arbeitnehmer) of Entrust GmbH or Entrust, Inc. but a Managing Director (Geschäftsführer) of Entrust GmbH and, as such, a corporate officer of Entrust GmbH and Entrust, Inc. Any potentially existing employment contract between you and Entrust GmbH is herewith mutually terminated and replaced by a managing director service contract providing for identical remuneration and benefits, except that your base salary shall be increased from 135,000.00 to 175,000.00 EUROS, and your sales incentive target from 122,900.00 to 150,000.00 EUROS. Entrust has the right to modify the sales incentive targets and/or the terms and conditions of the Entrust Sales Compensation Plan at any time. Your salary and performance will be subject to review on an annual basis. The responsibilities of this position have been reviewed with you. However, should you have any questions, please contact Bill Conner.

Stock Options and Restricted Stock Units

Additionally, you will be offered a stock option award to purchase 50,000 shares of common stock of Entrust, Inc. This award is subject to your acceptance of the terms and conditions of an Option Award Agreement that must be executed by you and the terms and conditions of the applicable Entrust’s Amended and Restated 1996 Stock Incentive Plan. Both of these documents will be provided to you in due course. The strike price for this award will be equal to the fair market value of the common stock at close of business on your Commencement Date. The option will have an expiration date which is seven years from the Commencement Date and the vesting conditions that will be outlined in your Option Award Agreement will include the following:

Additionally, you will be offered 7,500 shares of Restricted Stock Units (“RSU”) for Entrust, Inc. This award will be subject to the terms and conditions of an RSU Award Agreement to be executed by you, as well as Entrust’s Amended and Restated 1996 Stock Incentive Plan. Both of these documents will be provided to you in due course. The Restricted Stock Unit shall vest, in whole or in part, as to 25% of the shares subject to the Award Agreement shall vest on each of the first, second, third and fourth anniversaries of the Commencement Date, subject to you continuing to be a Service Provider (as defined in the Plan) through each such dates.

As an officer of Entrust, both of the aforementioned grants will be subject to acceleration upon certain acquisition events as set forth in the governing award agreements and plan.

Additional Terms

This Agreement and the matters referenced herein constitute the entire shared understanding of your appoint with Entrust and Entrust, Inc. This Agreement supersedes any prior understandings or representations. The Confidentiality, Non-Solicitation, and Code of Conduct Schedule which is attached as Schedule 1 and is hereby incorporate into and made part of this Agreement.

Notice and Severance Entitlements

The proposed severance arrangement would provide you with severance benefits in the event that you experience an Involuntary Termination (as defined below) of your managing director contract with Entrust. The arrangement is intended to reduce uncertainty over severance treatment in the event of an Involuntary Termination and to create an incentive for you to continue to focus on leading and executing our business plan. For the avoidance of any doubt, you expressly acknowledge and agree that you are not entitled to any severance or notice from Entrust, Inc. upon termination of your appointment as officer.

Subject to the terms described below, if you experience an Involuntary Termination of your managing director contract with the Company, you will be entitled to continuation of your then-current base salary for nine (9) months (the “Severance Period”). Any mandatory notice period under German law will be included in the Severance Period. During the Severance Period, you will also remain eligible to participate in any Entrust-provided benefit plans and programs in which you participated prior to separation under the terms of the controlling plans, programs or policies. However, you will not be eligible for any bonuses during the Severance Period, unless the bonuses were accrued and payable prior to the date of an Involuntary Termination, nor will you be eligible for salary increases, new stock option grants, or continued accrual of vacation or sick leave during the Severance Period. Any currently held stock options will continue to vest during the Severance Period. Salary and bonus payments during the Severance Period will be made less appropriate deductions and withholdings and will be paid in according with the Company’s normal payroll practices. Benefit continuation will be subject to the terms and contributions rates generally applicable under the controlling plan, program, or policy.

For purposes of your right to severance benefits, an Involuntary Termination shall mean termination of your managing director contract by Entrust without “Cause”. For purposes of this Agreement, “Cause” shall mean, in particular: (i) willful misconduct or gross negligence in carrying out your assigned duties; (ii) knowing violation of any reasonable rule, direction, or policy of the Company, Entrust, Inc., its President, or its Board; (iii) any act of misappropriation, embezzlement, intentional fraud, or similar conduct involving the Company or any of its affiliates; (iv) conviction or a plea of nolo contendere or the equivalent to a felony; (v) failure to comply with all material applicable laws and regulations in performing your duties and responsibilities for the Company; and (vi) abuse of alcohol or of any controlled substance.

Except as expressly provided for herein, this Agreement does not change your working conditions as they existed prior to the execution of this Agreement. These terms and conditions cannot be changed by any statement, promise, policy, or course of conduct other than a written agreement signed by the authorized representative of the sole shareholder of the Company, currently, the Chief Executive Officer of Entrust, Inc.

Eligibility for benefits under this Agreement is contingent upon: (i) timely signing and returning this